Above, Andy Florance
In its Q1 2025 earnings call, CoStar Group Founder and CEO Andy Florance touted Homes.com’s growth, the completed Matterport acquisition and spent significant time calling out Zillow’s move to ban some privately marketed listings.
Criticizing “the power grab Zillow was attempting,” Florance said that “competitors are becoming anxious that brokers with more choice may choose to market their properties away from those lead-diversion platforms.”
“If more and more listing agents stay off their platforms and the listing count will fall, and they could lose audience and fall into a downward spiral,” Florance detailed. “We view this move not only as anti-competitive, but also shows a bit of desperation.”
When asked about how brokerages have reacted to Zillow’s delayed market listing exemption, Florance said he has heard and read hundreds of comments from agents—and claimed the reactions are about 90% negative.
“There’s a pretty transparent thought there that they’re requiring people to put their listings up early in order to make sure that they have a chance to monetize them and people aren’t taking their listings to market without going through Zillow first,” Florance said. “I think that is sort of a surprising, overt sort of act that I think shows a little bit of weakness. But I think it’s being confused a little bit with something related to Compass; I don’t think it is. It is unusual to see something the National Association of REALTORS® (NAR) is allowing having a portal trying to set a new set of rules. It created a good opportunity for us, for sure.”
Noting he didn’t want to go into what Compass and eXp are doing, Florance said there is an important dynamic changing with clear cooperation (CCP) becoming more flexible and with the no-commingling rules on the MLSs changing.
“People begin to question where they want their listings to go and when they want them to go there,” he said. “Lead diversion models are not popular. They don’t exist in other countries because when people have a choice as to where they market their listings, they choose not to have their leads taken and sold off.
“I think there’s generally some anxiety on the part of some of those folks that the people will make more choices to avoid the lead diversion platforms longer, and that positions us really well because we are actually in harmony with everyone; because we actually present their listings with their names on them, and we are not trying to rewrite the rules, and we’re not trying to regulate it.”
Florance also mentioned a new purchase option available to agents on Homes.com called “Boost,” a marketing option for a single listing. According to the Homes.com site, Boost allows properties to be marketed to “high intent buyers across thousands of websites, including social media platforms such as Facebook and Instagram.” Boosted homes sort to the top of search results, giving agents’ properties more exposure so they can sell faster and for more, the site says.
On the call, Florence said the offering is especially well-suited for agents still building their business.
“For agents with unpredictable income and not yet ready to commit to an annual membership, they can boost one listing via e-commerce,” Florence said on the call. “Just like membership, once boosted, their listing source at the top of search results, receives a Matterport and is retargeted across the Internet. This is a low-risk purchase option for an agent because they can go into a listing presentation, use the Boost as a differentiator but they only have to pay for it when they win the listing and have offsetting commission revenue.”
He added, “From our perspective, Boost is a great way for agents to get their foot in the door and we will be funneling Boost purchases as leads into our sales team to call upon for upsales to membership.”
He said they will also be offering the Boost option directly to homesellers.
By the numbers
At the end of February, CoStar closed on the acquisition of Matterport, which Florance said would benefit the entire CoStar ecosystem. They closed the deal right at, if not ahead of, schedule, as Florance predicted during the last earnings call that the deal would be closed by the end of this quarter.
On March 27, CoStar made an all-cash offer for Domain Holdings, one of Australia’s two largest real estate portals, with Florance adding that they are in the process of conducting due diligence.
In just 14 months, Homes.com reached 36% unaided consumer awareness and 104 million average monthly unique visitors in Q1 2025, according to CoStar.
CoStar’s revenue grew 12% this quarter, year-over-year, to $732 million, with Matterport contributing $15.9 million in revenue for the quarter, said Christian M. Lown, CoStar’s chief financial officer. Primarily from that one-time acquisition cost, CoStar posted a $15 million net loss in the first quarter.
CoStar stock was down sharply, nearly 10% in trading Wednesday amid a broader market selloff.
“Even considering what continues to be a difficult commercial real estate backdrop, CoStar’s net new bookings continue to improve and are now at the highest levels since the third quarter of 2023,” Lown added. “While we do anticipate some slight headwinds from government contract cancellations, expected throughout 2025, we still expect CoStar revenue growth to remain at 6% in the second quarter. We are maintaining a 6% – 7% revenue growth guidance for the full year.”
Up until recently, Matterport has only had about five salespeople to cover all regions outside of the U.S., said Florance, so he added that there’s plenty of room for growth.
For Apartments.com, revenue grew 11% year-over-year in the first quarter.
LoopNet, the company’s commercial property marketplace, showed a 200% increase in net new bookings—the highest since Q3 2022.
Visual Lease, a lease administration and accounting platform acquired by CoStar in November 2024, is in the integration process with CoStar’s Real Estate Manager. The beta launch is expected by the end of the year, added Lown.
Offering a sneak peek, Florance teased the July launch of a new offering for homebuilders to market new construction. Although new builds account for 20% of annual home sales, Florance said, “there’s no great single place for a consumer to go and find all the available new communities.
Building a site with a full inventory of available new homes would be a very valuable option for both consumers and the industry, and it would allow Homes.com to capture a piece of the estimated $3 billion annual marketing spend by America’s homebuilders,” he said. “We’ve already secured listing feeds representing 60% of the total available inventory, and I expect this number will grow as we approach July.”
April’s demo-to-close rate was 56%, the highest for any CoStar brand. By the end of the year, the Homes.com sales team will likely be the largest and bring in the most revenue, added Florance.
Through its paid membership—a marketing package that gives agents listing priority placement and a Matterport floor plan—Homes.com member agents are winning 61% more listings than before membership.
